NAM: Proposed Ozone Rule Still Most Costly in U.S. History

New Analysis Shows Trillions in Costs, Millions of Jobs Endangered

Washington, D.C., February 26, 2015 — An update of the landmark study conducted by National Economic Research Associates (NERA) Economic Consulting and commissioned by the National Association of Manufacturers (NAM) reveals that the more stringent ozone standard proposed by the Environmental Protection Agency (EPA) could reduce GDP by $140 billion per year and carry a compliance price tag of $1.1 trillion. The new information confirms the NAM’s previous finding that the proposed rule could be the most expensive regulation in U.S. history.

In total, the updated study found that revising the ozone standard from 75 parts per billion (ppb) to 65 ppb could:

Reduce U.S. GDP by $140 billion per year and $1.7 trillion from 2017 to 2040;

Result in 1.4 million fewer job equivalents per year on average through 2040; and

Cost the average U.S. household $830 per year in the form of lost consumption.

“Manufacturers in the United States are in the midst of a resurgence that’s fueling job growth and economic recovery nationwide, but the proposed tightening of the ozone standard puts our momentum at great risk,” NAM President and CEO Jay Timmons said. “This data confirms our long-held concern that revisions to the ozone standard represent one of the most significant threats, not just to our manufacturing sector, but to our economy at large.”

“The Administration’s push for a more restrictive ozone standard is yet another painful example of the need for comprehensive regulatory reform,” NAM Senior Vice President of Policy and Government Relations Aric Newhouse said. “Further tightening of an existing standard that so many parts of our nation still can’t meet creates an undue strain on our economic recovery. Rather than adding to the regulatory pains already felt so acutely by our nation’s manufacturing sector, the Administration should focus on allowing existing standards to be fully implemented.”

“This updated analysis of our July 2014 report reaffirms that attaining a stricter ozone standard would require compliance costs at levels well beyond what the EPA has admitted, and beyond what we have ever estimated for any other EPA regulation,” said NERA Senior Vice President and Environment Practice Co-Chair Anne Smith. “Costs of this magnitude would clearly leave their mark on the U.S. economy.”

The EPA unveiled its latest proposal to tighten the ozone standard to between 65 and 70 ppb in November 2014. President Barack Obama halted the agency’s prior effort to reduce the standard in 2011, citing the “regulatory burdens and uncertainty” created by the rule. The Administration is accepting public comments on the proposed rule through March 17.

The National Association of Manufacturers (NAM) is the largest manufacturing association in the United States, representing small and large manufacturers in every industrial sector and in all 50 states. Manufacturing employs more than 12 million men and women, contributes $2.09 trillion to the U.S. economy annually, has the largest economic impact of any major sector and accounts for more than three-quarters of private-sector research and development. The NAM is the powerful voice of the manufacturing community and the leading advocate for a policy agenda that helps manufacturers compete in the global economy and create jobs across the United States. For more information about the Manufacturers or to follow us on Shopfloor, Twitter and Facebook, please visit www.nam.org.